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Audit Finds NJ Inmates Collecting Government Benefits

TRENTON, N.J. (AP) — Inmates in New Jersey have been collecting millions of dollars in unemployment, health care and retirement benefits they shouldn’t have received, according to a report released Wednesday by the state comptroller’s office.

The report shows the state paid inmates $23 million in benefits over 22 months ending in April 2011. Those payments included jobless benefits, Medicaid coverage, food stamps, Work First cash assistance and state pension checks the inmates were not entitled to receive.

“These are vitally important social programs,” Comptroller Matt Boxer said. “Our audit identifies simple but critical steps that will help ensure that tax dollars spent on these programs are reserved for those who actually qualify for benefits.”

Boxer blamed gaps in oversight. For example, state agencies administering the public assistance programs failed to review county and state inmate data before awarding government benefits. Boxer said the departments responsible for administering each of the programs have vowed to recover the misspent money and to cross-check inmate data.

At the Labor Department, which oversees unemployment benefits, cross-checks of county inmate data began in March, Commissioner Hal Wirths said. In addition, the department’s anti-fraud efforts, which include computer software that detects claims filed from outside the United States and stepped up efforts to stop people from collecting jobless benefits after returning to work, have saved $235 million, he said.

Incarcerated people are not entitled to unemployment benefits because they don’t meet the condition of being able and available for work. Inmates don’t need Medicaid because they receive health care while imprisoned. And they forfeit their pension rights upon conviction of a crime involving “moral turpitude,” a legal term for behaviors that go against community standards.

Nonetheless, the state paid out $11 million in jobless benefits to 7,600 inmates during the audit period, including $39,600 to one man jailed for a drug-related offense and $25,700 to another man starting three months after he had been imprisoned for illegally firearm possession.

The comptroller’s investigation into Medicaid fraud may lead to criminal charges. So far, it found $7 million in improper payments to Medicaid-managed organizations, health clinics, hospitals and pharmacies on behalf of incarcerated people. Some of the money was paid out after Medicaid was billed for services rendered on patients using someone else’s Medicaid card, the report found.

Some $354,000 in pension payments to retired public workers should not have been made, according to the audit. The erroneous payments happened because the Treasury Department, which oversees pensions, does not match its database against county incarceration data, the report showed.

The largest improper payment of $37,000 went to a person incarcerated for sex assault of a minor.

The comptroller also found that 13 jailed state employees continued to be paid by using sick leave pay, in violation of state regulations.

In all, 20,000 incarcerated people were gaming the system by collecting improper payments, the report concluded.

A check of the state’s housing voucher and state Rental Assistance Program, both administered by the Department of Community Affairs, found minimal amounts of fraud.